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Teams Make You Smarter: How Exposure to Teams Improves Individual Decisions in Probability and Reasoning Tasks

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  • Boris Maciejovsky

    () (Imperial College Business School, Imperial College London, London SW7 2AZ, United Kingdom)

  • Matthias Sutter

    () (University of Innsbruck, A-6020 Innsbruck, Austria; and University of Gothenburg, SE-40530 Göteborg, Sweden)

  • David V. Budescu

    () (Fordham University, Bronx, New York 10458)

  • Patrick Bernau

    () (Albertus-Magnus-Platz, 50923 Köln, Germany; and University of Innsbruck, A-6020 Innsbruck, Austria)

Abstract

Many important decisions are routinely made by transient and temporary teams, which perform their duty and disperse. Team members often continue making similar decisions as individuals. We study how the experience of team decision making affects subsequent individual decisions in two seminal probability and reasoning tasks, the Monty Hall problem and the Wason selection task. Both tasks are hard and involve a general rule, thus allowing for knowledge transfers, and can be embedded in the context of markets that offer identical incentives to teams and individuals. Our results show that teams trade closer to the rational level, learn the solution faster, and achieve this with weaker, less specific performance feedback than individuals. Most importantly, we observe significant knowledge transfers from team decision making to subsequent individual performances that take place up to five weeks later, indicating that exposure to team decision making has strong positive spillovers on the quality of individual decisions. This paper was accepted by Uri Gneezy, behavioral economics.

Suggested Citation

  • Boris Maciejovsky & Matthias Sutter & David V. Budescu & Patrick Bernau, 2013. "Teams Make You Smarter: How Exposure to Teams Improves Individual Decisions in Probability and Reasoning Tasks," Management Science, INFORMS, vol. 59(6), pages 1255-1270, June.
  • Handle: RePEc:inm:ormnsc:v:59:y:2013:i:6:p:1255-1270
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    File URL: http://dx.doi.org/10.1287/mnsc.1120.1668
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    References listed on IDEAS

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    1. Slembeck, Tilman & Tyran, Jean-Robert, 2004. "Do institutions promote rationality?: An experimental study of the three-door anomaly," Journal of Economic Behavior & Organization, Elsevier, vol. 54(3), pages 337-350, July.
    2. Kugler, Tamar & Kausel, E.E. & Kocher, Martin G., 2012. "Are groups more rational than individuals? A review of interactive decision making in groups," Munich Reprints in Economics 18215, University of Munich, Department of Economics.
    3. Brian D. Kluger & Steve B. Wyatt, 2004. "Are Judgment Errors Reflected in Market Prices and Allocations? Experimental Evidence Based on the Monty Hall Problem," Journal of Finance, American Finance Association, vol. 59(3), pages 969-998, June.
    4. Friedman, Daniel, 1998. "Monty Hall's Three Doors: Construction and Deconstruction of a Choice Anomaly," American Economic Review, American Economic Association, vol. 88(4), pages 933-946, September.
    5. David J. Cooper & John H. Kagel, 2005. "Are Two Heads Better Than One? Team versus Individual Play in Signaling Games," American Economic Review, American Economic Association, vol. 95(3), pages 477-509, June.
    6. Camerer, Colin F, 1987. "Do Biases in Probability Judgment Matter in Markets? Experimental Evidence," American Economic Review, American Economic Association, vol. 77(5), pages 981-997, December.
    7. Kugler, Tamar & Kausel, E.E. & Kocher, Martin G., 2012. "Are groups more rational than individuals? A review of interactive decision making in groups," Munich Reprints in Economics 18215, University of Munich, Department of Economics.
    8. Gary Bornstein & Ilan Yaniv, 1998. "Individual and Group Behavior in the Ultimatum Game: Are Groups More “Rational” Players?," Experimental Economics, Springer;Economic Science Association, vol. 1(1), pages 101-108, June.
    9. Samuelson, William & Zeckhauser, Richard, 1988. "Status Quo Bias in Decision Making," Journal of Risk and Uncertainty, Springer, vol. 1(1), pages 7-59, March.
    10. Francesco Feri & Bernd Irlenbusch & Matthias Sutter, 2010. "Efficiency Gains from Team-Based Coordination—Large-Scale Experimental Evidence," American Economic Review, American Economic Association, vol. 100(4), pages 1892-1912, September.
    11. Bornstein, Gary & Kugler, Tamar & Budescu, David V. & Selten, Reinhard, 2008. "Repeated price competition between individuals and between teams," Journal of Economic Behavior & Organization, Elsevier, vol. 66(3-4), pages 808-821, June.
    12. Gary Charness & Matthias Sutter, 2012. "Groups Make Better Self-Interested Decisions," Journal of Economic Perspectives, American Economic Association, vol. 26(3), pages 157-176, Summer.
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    Citations

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    Cited by:

    1. Cooper, David J. & Saral, Krista & Villeval, Marie Claire, 2019. "Why Join a Team?," IZA Discussion Papers 12587, Institute of Labor Economics (IZA).
      • David Cooper & Krista Saral & Marie Claire Villeval, 2019. "Why Join a Team?," Working Papers halshs-02295921, HAL.
      • David J. Cooper & Krista Saral & Marie Claire Villeval, 2019. "Why Join a Team?," Working Papers 1928, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    2. Julia Müller & Thorsten Upmann, 2017. "Eigenvalue Productivity: Measurement of Individual Contributions in Teams," CESifo Working Paper Series 6679, CESifo Group Munich.
    3. repec:eee:iburev:v:26:y:2017:i:3:p:592-603 is not listed on IDEAS
    4. Laurent Denant-Boemont & Enrico Diecidue & Olivier l’Haridon, 2017. "Patience and time consistency in collective decisions," Experimental Economics, Springer;Economic Science Association, vol. 20(1), pages 181-208, March.
    5. repec:kap:compec:v:53:y:2019:i:1:d:10.1007_s10614-017-9731-3 is not listed on IDEAS
    6. repec:wsi:jikmxx:v:16:y:2017:i:02:n:s0219649217500101 is not listed on IDEAS
    7. van Dijk, Frans & Sonnemans, Joep & Bauw, Eddy, 2014. "Judicial error by groups and individuals," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 224-235.
    8. Aurélien Baillon & Han Bleichrodt & Ning Liu & Peter P. Wakker, 2016. "Group decision rules and group rationality under risk," Journal of Risk and Uncertainty, Springer, vol. 52(2), pages 99-116, April.

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